The effects of the Global Entrepreneurship Summit being held in Kenya

Jul 12, 2015

The Global Entrepreneurship Summit (GES) is a global forum that brings together business owners, young innovators, educationalists, policymakers, thought leaders and investors from across the globe to support developing regions. Since 2010, the U.S has elevated entrepreneurship to the forefront of its engagement with the world and the GES is a formal annual forum for the engagement. The 6th annual gathering is being held in Kenya on 25th - 26th July 2015, and is being co-hosted by U.S. president Barrack Obama and Kenya’s president Uhuru Kenyatta. This will be the first time that the summit is held in Sub-Saharan Africa, and the decision to hold it in Kenya showcases the country’s huge economic potential. Kenya join’s Turkey, UAE, Malaysia and Morocco as previous hosts of GES.

The country is blessed in numerous enviable ways – a great geographical location that makes it a regional hub; great weather; an educated, numerate, literate and welcoming population with an entrepreneurial spirit; a magnet for tourists given breathtaking landscapes, pristine beaches and unique wildlife. Kenya is home to the world’s best marathoners, the world’s best mobile money platform, MPesa and a lineage to the first black president of the U.S. We have always held that the country’s biggest challenge is its reluctance or inability to step up to its vast potentials. The GES is a significant opportunity and reminder for the country and its entrepreneurs to take advantage of the country’s vast economic potential.

Entrepreneurship and innovation are essential to economic prosperity; and economic prosperity is in turn essential to addressing some of our most intractable challenges such as poverty, hunger, unemployment, inequity, insecurity and a weak shilling due to net importation.

Past summits have opened new markets for products and encouraged policy makers to break down barriers to business. Morocco for instance, following the 5th Global Entrepreneurship Summit, received considerable investments. First, there was an innovation in Science and Technology Network, which is aimed at providing Science and Technology entrepreneurs with online resources and mentorship to collaborate seek funding and grow their businesses. Second, Morocco received a USD 50 mn investment through the Millennium Challenge Corporation that is set to promote PPPs to encourage and support entrepreneurs. Third, a new vocational school for mechanics in Morocco through UN agency UNIDO, USAID, the OCP Foundation and Sweden’s Volvo Group was set up and this will push up the employment numbers in the industry that stood at 26% in 2012. Fourth, a credit guarantee from USAID in partnership with Spain to help finance a new cold storage facility at Morocco’s Tangier Med Port will support the expansion of Morocco’s agricultural value chain, resulting in growing exports and job creation.

As with most conferences and summits, what really matters is what happens after the summit. For Kenya, fortunately we already have an entrepreneurial spirit and culture. Consequently, the most effective area for government and policy makers is to focus efforts on breaking barriers to entrepreneurship in Kenya. We identify the following key areas as means to enhance entrepreneurship in the country:

  1. Improve access to capital for entrepreneurs. We believe that both a local and a global access strategy are essential. Locally, the government can explore ideas such as a professionally run Kenya sovereign venture fund, in partnership with commercial oriented development agencies such as the Millennial Challenge Corporation, to fund proven ventures. A shilling for shilling matched funding of a ventured fund between the GoK and MCC is a viable idea. Globally, working to make Kenya a regional financial hub and establishing free trade districts would improve access to capital
  2. Create a specific agency / authority to nurture entrepreneurship in the country, especially for women and youth. For example, in the US, the Small Business Administration exists specifically to assist small businesses. While initiatives like Kazi Kwa Vijana are good starting steps, they are not sustainable. An agency that is professionally administered, with specific accountability and deliverables for developing entrepreneurs and enabling entrepreneurship is the more sustainable approach
  3. Improve ease of doing business by making processes such as company registration, searches, compliance, title documents more efficient
  4. Improve commercial dispute resolution process and speed in order to stop the common abuse of court process to stifle competition and innovation. For example, while the judicial system is essential to a functioning free market, we think that Equitel’s launch has been unnecessarily slowed down by court process
  5. Make it fairly easy for companies to access capital markets, especially through initial listings and structured products. The ratio of Kenya’s listed companies to every 1 million people, at 1x, compared to South Africa’s 6x or the United States 16x is unacceptably low. A vibrant and transparent capital market is essential to attracting foreign direct investments and risk capital to fund entrepreneurs

Disclaimer: The views expressed in this publication, are those of the writers where particulars are not warranted- as the facts may change from time to time. This publication is meant for general information only, and is not a warranty, representation or solicitation for any product that may be on offer. Readers are thereby advised in all circumstances, to seek the advice of an independent financial advisor to advise them of the suitability of any financial product for their investment purposes.